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October 28, 2013

Company Name: Mizuho Financial Group, Inc.
Representative: Yasuhiro Sato, Group CEO
Address: 2–5–1 Marunouchi, Chiyoda–ku, Tokyo
Security Code: 8411 (Tokyo Stock Exchange 1st Section)

Submission of Business Improvement Plan by Mizuho Bank Ltd. and Actions by Mizuho Financial Group, Inc.

Mizuho Financial Group, Inc. (MHFG) subsidiary Mizuho Bank, Ltd. (MHBK) today submitted a business improvement plan to the Japanese Financial Services Agency based on the business improvement order (No. 2094) that it received on September 27, 2013. (See attached MHBK press release regarding the business improvement order for details.)

We would like to take this opportunity to express our most sincere apologies to our valued customers and other stakeholders for the inconvenience and concern that we have caused in relation to this business improvement order.

In light of the order, MHFG has investigated all of our subsidiaries in Japan in relation to the status of their control of transactions with anti–social elements. Specifically, these investigations included whether appropriate management reporting and process control frameworks are in place within each group subsidiary, whether there are transactions with similar structures as the current problematic captive loan scheme (also referred to as "tie–up loans", "joint loans", and "four–party loans"), and whether attribute verifications are performed at both entry and post–execution stages of credit transactions. The investigations did not find any new anti–social transactions other than the transactions under the captive loan scheme in MHBK.

We will continue these efforts going forward to ensure sound products and services on a group basis, further enhance measures to sever ties with anti–social elements, and fulfill our responsibility to society.

As holding company, MHFG will further enhance our frameworks to sever ties with anti–social elements and improve corporate culture through the following:

1. Strengthening frameworks to eliminate transactions with anti–social elements reflecting changes in society

(1) Reviewing Compliance Group Structure

A) Reorganization of the Compliance Division

As various risks become increasingly sophisticated and expectations of society strengthen, we must respond in even more detail than we have to date. We have decided to increase management participation in Compliance Division functions by reorganizing and separating (1) overall compliance and compliance framework functions and (2) crisis management and individual and urgent response functions.

Particularly in relation to crisis management and individual and urgent response functions, we will create a new division responsible for elimination of transactions with anti–social elements by elevating the status of the existing department to a division. The new division will specialize and focus on severing relationships with anti–social elements by promptly responding to latest trends and topics.

In addition, we will enhance planning functions for severing relationships with anti–social elements and increase personnel in the new division. We will also accelerate efforts to eliminate transactions with anti–social elements on a group basis through effective monitoring of products and services, research on latest trends, collection of specialized information, and collaboration with law enforcement headquarters throughout Japan and external specialists such as private–sector legal professionals that specialize in anti–social elements.

B) Deployment of a Deputy President as the Group Chief Compliance Officer

With renewed strength in our awareness of thorough compliance including severing ties with anti–social elements being at the fundamental core of the management of a financial institution that is built on foundations of trust, we believe that restoring the trust of our customers, shareholders, and the wider society through thorough compliance going forward is one of our most important management challenges. Accordingly, we have deployed a Deputy President as the Group Chief Compliance Officer.

(2) Strengthening governance toward elimination of transactions with anti–social elements

A) Establishment of the Anti–social Elements Elimination Committee

Until now, matters related to anti–social elements have been discussed and decided in the Compliance Committee as a critical compliance item. We have now established the separated Anti–social Elements Elimination Committee, chaired by the Group CEO, which will be responsible for items related to addressing anti–social elements from the perspective of strengthening our response.

Committees similar to this new Anti–social Elements Elimination Committee will also be established in our major group companies: Mizuho Bank, Ltd., Mizuho Trust & Banking Co., Ltd., and Mizuho Securities Co., Ltd.

Members of these committees from our major group companies will also participate in the MHFG committee, and monitor products and services on a group basis. The MHFG committee will take actions to sever ties with anti–social elements by cooperation mutually across the group such as researching the latest trends in the banking industry, collecting specialized information, and providing recommendations.

In order to ensure that the committee is sensitive to changes in social attitudes and conducts appropriate debate and adjustments toward building robust measures, we are scheduled to select an external expert as a special committee member so that we receive objective opinions and suggestions from a third–party perspective.

B) Initiatives to ensure effective debate in the Anti–social Elements Elimination Committee

We will clarify operational rules for the new Anti–social Elements Elimination Committee and for the Compliance Committee to improve the effectiveness of debate, such as distribution of materials prior to meetings, detailed descriptions and explanations of the issues and key points in the materials, and securing sufficient time for debate and reporting depending on content.

C) Appointment of an external director to the Board of Directors

From the perspective further enhancing the compliance framework for the group as a whole, we are scheduled to appoint an external director who is a specialist in compliance, governance, and crisis management.

D) Strengthening of management reporting and contact structure regarding information on anti–social elements

We will strengthen group reporting and contact structures for reporting to management by clarifying rules with a focus on items related to transactions with anti–social elements.

2. Further improvement in awareness regarding severing ties with anti–social elements

(1) Enriching compliance training

We will enrich group compliance training to further improve the awareness and sensitivity of executives and employees in relation to severing ties with anti–social elements with a focus on ethics and an awareness of the intention and spirit of laws.

3. Improving corporate culture

(1) Improving awareness by revising the Mizuho Code of Conduct

Based on the increasing expectations of society in relation to severing ties with anti–social elements, we will review the Mizuho Code of Conduct that was established at the time of the merger that formed the Mizuho group. We will conduct a further clarification both internally and externally of MHFG's approach toward severing ties with anti–social elements, and we will aim to further improve awareness among all group executives and employees.

(2) Promotion of continued actions in cooperation with the One MIZUHO Promotion Project Team *

We will change the culture of habitual and silo–based behaviors that have been observed within a small part of the organization and share a sense of common values in which each and every employee takes a flexible approach to changes in society and proactively steps up to the challenges they face. As a group, we will also promote further strengthening of the following ongoing initiatives within the project team, from the perspective of driving the self–starting actions of each and every employee:

  • We have commenced discussion sessions with senior management at all head office divisions and marketing offices.
  • We will hold off–site meetings for general managers of head office divisions and marketing offices at major group companies.
  1. *The One MIZUHO Promotion Project Team was established to promote actions to disseminate the medium–term business plan and Mizuho corporate philosophy throughout the group toward realization of the Mizuho group vision.

4. Further sophistication of group governance

(1) Considering expansion of consulting bodies to the Board of Directors

Reflecting on trends in corporate management both within the group and externally, we will consider expanding consulting bodies to the Board of Directors in order to reflect the opinions of external experts and from the perspective of enhancing sophistication of group governance.

(Mizuho Bank, Ltd.) Submission of Business Improvement Plan (PDF/36KB)PDF

Penalties for Management (PDF/58KB)PDF

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